CRA Def­i­ni­tion Re­vi­sions Pro­posed

THE THREE FED­ERAL PRU­den­tial bank reg­u­la­tors have pro­posed re­vis­ing cer­tain def­i­ni­tions in Com­mu­nity Rein­vest­ment Act reg­u­la­tions to stay aligned with a re­cent rule from the Con­sumer Fi­nan­cial Pro­tec­tion Bureau.

Un­der the pro­posal, the Fed­eral De­posit In­sur­ance Corp, Of­fice of the Comptroller of the Cur­rency and Fed­eral Re­serve Board would up­date def­i­ni­tions of terms such as “home mort­gage loan” and “con­sumer loan” to be con­sis­tent with new re­quire­ments im­ple­mented by the CFPB un­der the Home Mort­gage Dis­clo­sure Act. The HMDA changes go into ef­fect in Jan­uary 2018.

Since 1995, the agen­cies “have con­formed cer­tain def­i­ni­tions in their re­spec­tive CRA reg­u­la­tions to the scope of loans” used for HMDA “and be­lieve that con­tin­u­ing to do so pro­duces a less-bur­den­some CRA per­for­mance eval­u­a­tion process,” the three reg­u­la­tors said in a press re­lease.

Un­der the new CFPB rule, most con­sumer-fac­ing mort­gage trans­ac­tions must be re­ported un­der HMDA, as long as they are col­lat­er­al­ized with a home.

Un­se­cured home im­prove­ment loans, how­ever, would not be sub­ject to such re­port­ing re­quire­ments.

The draft pro­posal would also make tech­ni­cal changes and re­move out­dated ref­er­ences to the Neigh­bor­hood Sta­bi­liza­tion Pro­gram.